"This is the minimum step that I demanded. He now has to prove himself to me. For the time being he is on leave but when he comes back I expect him to behave in an appropriate way," Mr Goff said.

He would stay on in the conservation role in the meantime "but he is on notice".

"I have told him he is on leave at my insistence for however long it takes. I expect when he comes back he will have thought thought the consequences of his actions and I expect to see a different behaviour."

Mr Carter issued his apology within half an hour of being sent home by Mr Goff.

Mr Goff said his future in the party "is up to him". He had to demonstrate he has the judgement and the ability to regain Mr Goff's trust.

"It is clear to me that a public apology is both demanded and required in regard to my expenses when travelling overseas on government business on the taxpayer expense," Mr Carter said in a statement.

"I unreservedly apologise to the New Zealand public."

Earlier a clearly angry Mr Goff made it clear that Mr Carter's refusal to acknowledge he had let the public down and spent too much on travel had jeopardised his ranking in the caucus.

Mr Carter said he had faced a difficult time and it had been difficult to choose the right words to be said when under intense pressure from journalists.

"I acknowledge that my temperament when under pressure can make me appear as if I am not contrite or embarrassed. I assure the New Zealand public I am."

He pledged to work hard for Labour and his electorate.

"I wish to put this matter behind me."

Mr Carter was bumped five spots down Labour's rankings and stripped of his portfolios for racking up personal spending on his ministerial credit card while he was a Government minister.

Mr Goff said he had made it clear to Mr Carter and other MPs sanctioned over their spending that they would be judged by their behaviour.

Mr Chauvel picks up the environment portfolio from the demoted Shane Jones and moves to number 12 in Labour's line-up.

Mr Robertson moves to number 20 and picks up tertiary education from list MP Maryan Street, who picks up Mr Carter's foreign affairs portfolio and is ranked at number 7.

Whip Darren Hughes picks up the infrastructure portfolio and moves to number 8 in the rankings, while Ms Mahuta comes back from a spell in the backbenches to pick up the energy portfolio and take up a seat on the front bench at number 11. She declined promotion last year to focus on motherhood.

In other changes, list MP David Parker picks up the economic development portfolio and Stuart Nash picks up forestry.

Mr Jones, Mr Carter and list MP Mita Ririnui were stripped of their portfolios yesterday for using their ministerial credit cards while Labour was in office to bill personal items to the taxpayer, though they subsequently paid the money back.

Mr Jones, who has apologised and shown contrition, suffered the heaviest penalty, being dumped from the front bench to number 21 in Labour's line up.

Mr Carter was also demoted, but eyebrows will be raised that his punishment does not seem as severe, after he dropped only five places to number 13.